SINGAPORE — Some metals staged a tentative rally in late Asian trade on Wednesday, recovering from an earlier drop when unprecedented turmoil in the oil markets sent investors fleeing riskier assets.
Oil markets suffered their most turbulent days yet on Monday and Tuesday, as U.S. futures were dragged into negative territory by huge volumes of surplus crude and a lack of anywhere to store them.
“Risk-off sentiment has risen along with the oil market rout, and the metals complex was unable to escape this pressure,” ING analysts said in a note.
“Given supply-and-demand dynamics in the short term …the recent rally does not have a strong footing,” the note said, referring to price increases in base metals driven by signs of improving demand in China and supply disruptions because of the novel coronavirus pandemic.
The most-traded June copper contract on the Shanghai Futures Exchange (ShFE) closed down 1.5% at 41,090 yuan ($5,801.38) a tonne.
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The June contract was further pressured by traders’ hopes that China will reduce value-added tax on metals from June, pushing the premium of the May contract over the June contract to close at 150 yuan a tonne.
It was the widest gap between front month and second month contracts since March 2019.
Three-month copper on the London Metal Exchange (LME) fell as much as 1.1% to $4,973.50 a tonne, before paring losses to edge up 0.2% to $5,042 a tonne at 0735 GMT, in line with a rebound across other markets in late Asian trading hours.
* ANTOFAGASTA: Chile’s Antofagasta said copper production would be at the lower end of guidance because of the coronavirus pandemic.
* TECK RESOURCES: Canadian miner Teck Resources Ltd posted a much bigger-than-expected 84% plunge in quarterly profit and announced it was temporarily suspending operations at the Antamina copper mine.
* JAPAN COPPER: Japan’s copper cable sales fell 2.4% in March to 57,400 tonnes from last year, the Japan Electric Wire and Cable Makers’ Association said.
* U.S. STIMULUS: The U.S. Senate on Tuesday approved $484 billion in fresh relief for the U.S. economy and hospitals hammered by the coronavirus pandemic.